GE Aerospace, a segment of General Electric listed on the New York Stock Exchange under the ticker GE, saw its stock price decrease significantly on Thursday, reversing earlier gains despite delivering a strong financial report for the fourth quarter and a positive forecast for the year 2026.
In its quarterly performance announcement, GE Aerospace exceeded expectations with adjusted earnings per share (EPS) of $1.57, outperforming both Bank of America’s projected EPS of $1.39 and Bloomberg’s consensus estimate of $1.44. This surge was largely attributed to revenues and margins that also surpassed anticipations, highlighting the company's solid operational momentum.
Specifically, the company recorded $11.865 billion in revenue for the quarter, a figure that outpaced Bank of America's prediction of $11.25 billion and Bloomberg's estimate of $11.236 billion. The detailed breakdown revealed strong performances in GE Aerospace's key segments. The Commercial Engines & Services division generated $9.468 billion, exceeding Bank of America's forecast of $9.031 billion. This growth was notably supported by a 31% year-over-year increase in Services revenue, a result of heightened activity including more shop visits and greater spares production.
Similarly, the Defense & Propulsion Technologies segment posted revenue of $2.839 billion, outpacing an estimate of $2.628 billion. Within this segment, Defense contributed a 2% increase driven predominantly by favorable price and product mix, offsetting a 7% decline in volume. Propulsion experienced a substantial 33% revenue increase fueled by greater Avio volumes, underscoring the segment’s robust expansion.
Looking ahead, GE Aerospace issued an optimistic guidance for 2026. The company anticipates adjusted EPS ranging between $7.10 and $7.40, which generally aligns with the consensus estimate of $7.12. Concurrently, free cash flow is forecasted to reach $8.0 billion to $8.4 billion, indicating a strong liquidity position. The adjusted effective tax rate (ETR) is expected to remain below 17%, enhancing net profitability. Furthermore, no debt repayments are currently planned for 2026, as the company intends to refinance debt maturities arising in or after 2026.
Despite these favorable financial results and forward-looking projections, GE Aerospace shares traded down 5.52% to $305.81 at the time of reporting. This stock price movement suggests that investors may have tempered their response to the earnings announcement, potentially weighing other external or internal factors not detailed in the financial report.
Bank of America Securities analyst Ronald J. Epstein maintained a Buy rating on GE Aerospace's stock, upholding a price target of $365. Epstein highlighted the company’s outperformance in both earnings and revenue metrics and lauded the strength of the Commercial Engines & Services and Defense & Propulsion Technologies segments. He also pointed out that the 2026 earnings and revenue guidance compare favorably with his own forecasts, reflecting a solid outlook for the company in the medium term.
Comprehensive market indicators such as Benzinga Rankings provide additional insights into the stock’s performance. GE Aerospace scored highly on momentum and quality metrics, though its value score was comparatively low, reflecting current valuations relative to financial measures.
In summation, GE Aerospace's strong quarterly results and encouraging financial guidance portray a company well-positioned operationally and financially. However, the stock's decline on the day of the earnings release illustrates an element of market uncertainty or other investor considerations beyond the scope of reported financials.